Brunswick tax values could hinge on appeals court ruling

A decision by the state's Court of Appeals on the 2010 property tax values of a Coastal Companies development could determine the values of nearly 600 other Brunswick County lots currently in dispute, according to a state tax commission order.N.C. Court of Appeals judges were scheduled Thursday to hear arguments about whether Brunswick County illegally increased the value of about 110 undeveloped lots in Ocean Isle Palms, a Coastal Companies development in southern Brunswick County. In 2010, The Coastal Companies, an umbrella group for a number of developments in the county, appealed the valuations of about 900 of its undeveloped lots, including Ocean Isle Palms, after their values skyrocketed in 2008.In May, the state's Property Tax Commission heard arguments in the Ocean Isle Palms case.The county argued that it made a mistake in valuing the Ocean Isle lots and others like them at about $50,000 because they were selling at several times that rate in the midst of the real estate boom. The commission deemed the value hike illegal and ordered the county to return the values to 2007 levels if no improvements had been made to the lots. If the parcels had been developed, they should be valued according to the 2007 process, the commission said.The county appealed the tax commission's decision to the state court of appeals, which is scheduled to hear the case on Thursday. A decision in the case is not expected that day, said Charles Meeker, the county's Raleigh-based attorney.Meanwhile, six other Coastal appeals came before the tax commission on Jan. 19.During those hearings, attorneys for both sides agreed to allow the outcome of the Ocean Isle Palms appeal to determine the 2010 tax rates for about 600 other lots, according to the commission's order.If the appeals court affirms the commission's earlier decision that the values were illegally increased, the county would have to take several hundred thousand dollars off the developer's 2010 tax bill.If the court rules for the county, then the increased rates would stand. Both groups waived their rights to appeal either of those decisions, according to the order.If justices reverse the decision and send the case back to the tax commission, however, the commission would likely rule on all of the lots, a decision both sides could appeal."It all depends on the judgment of the appeals court," county spokesman Huey Marshall said. During the hearing, the county also decided to reduce its lot assessments in the Eagle Point development to 2007 tax levels, according to the order.Tax commissioners also decided they will hear arguments in connection to the value of 163 other lots in four developments, Coastal attorney Elaine Jordan said.A hearing date has not been set, according to the N.C. Department of Revenue.The real estate taxes figure in a default action filed Jan. 9 by Bank of America against the company and its owner Mark Saunders. The suit, which charges they have defaulted on about $78 million in debt, states that the company's failure to comply with a March 2010 plan to pay back real estate taxes in Brunswick County put it in default. The company had been on a payment plan for about $2.2 million in taxes for the years 2008 and 2009, but it did not make a roughly $1.5 million tax payment due to the county by the end of August.The company has contended the county owes it more than that because of "illegal actions," including the placement of a water line on Coastal property that is the subject of a lawsuit Coastal filed in June.

Cassie Foss: 343-2365On Twitter: @EyeOnBrunsco

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